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A General awareness session designed to give participants a better understanding about savings and various investment options available in the Indian context.
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Understanding Savings and Investments
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YOUR KEY TO WEALTH
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THE COMPANY- Target Capital Holding
Offers Investment Advisory Services
Managed by professionals with over 18 years of Investment and Advisory experience
Offers accurate and timely in- house research
Facilitates hassle free trading and demat account opening through tie-up with leading brokerage house- Reliance Securities
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Aim of the Presentation
A General awareness session designed to give participants a better understanding about savings and various investment options.
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Importance of SavingsDelaying Makes it Difficult
Rate of interest 10% 10 % 20 %
Monthly savings Rs. 1,000 Rs. 5,454 Rs. 2,000
Tenure 30 years 15 years 15 years
Amount accumulated
Rs. 22.79 lakh Rs. 22.79 lakh Rs. 22.68 lakh
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Rule of 72
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The number of years it will take for your investment to double at a given interest rate.
Interest Rate Years6% 128% 9
10% 712% 615% 520% 425% 330% 2
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What is Inflation
Inflation is a sustained increase in the general price level of goods and services over a period of time.
Inflation reduces the purchasing power of money.
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The gnawing effect of Inflation
Current price yearsFuture price at
8% inflationInterest
rateFuture
amount
₹ 20,000.00 12 ₹ 50,363.00 6% ₹ 40,000.00 ₹ 20,000.00 9 ₹ 39,980.00 8% ₹ 40,000.00 ₹ 20,000.00 7 ₹ 34,276.00 10% ₹ 40,000.00 ₹ 20,000.00 6 ₹ 31,737.00 12% ₹ 40,000.00 ₹ 20,000.00 5 ₹ 29,387.00 15% ₹ 40,000.00 ₹ 20,000.00 4 ₹ 27,210.00 20% ₹ 40,000.00 ₹ 20,000.00 3 ₹ 25,194.00 25% ₹ 40,000.00 ₹ 20,000.00 2.6 ₹ 23,328.00 30% ₹ 40,000.00
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Interest rate must beat Inflation rateRs 20000 takes 12 years at 6% interest to double but in the same time an item which cost Rs20000 will cost Rs 50000 in 12 years at 8% inflation.
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How To Earn Extra Money To Fight Inflation
Stock Markets
Corporate Bonds
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Stock Markets
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Unlimited Investment opportunity.
Earnings in form of Dividend and Capital appreciation.
High Liquidity
Hedging opportunity to mitigate risk.
Pros
Variable rate of return
Fear of Capital erosion
Cons
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Stock Market Returns (4years)
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30% growth
last year
Markets in uptrend since H2 2011
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How to Invest
Decide on Investment duration
Understand basic concepts of Stock market
Decide on whether to opt for self investment or to seek professional assistance
If Self investment – Do your Home work
If professional help- Study manager’s track record
Identify a good broker and obtain economical brokerage rates
Always add brokerage and taxes to obtain your cost price.
Monitor your portfolio periodically.
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Basic concepts- Stock Markets
Index-Nifty/Sensex
NSE/BSE
Blue chips
Scripts
Terminal- Buy/Sell
Price charts
Bulls/Bears
Demat Accounts
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Always Remember
Never buy/sell because an
acquaintance has done so.
Buy/Sell should be backed by
logic.
Control greed.
Be patient
Sustainable returns is more important than
immediate returns.
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Terminal
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Corporate Bonds/ NCD
Corporate bonds or non Convertible Debentures are debt instruments which pay fixed returns .
These bonds are backed by the credit worthiness or reputation of the issuer.
Can be purchased directly from the issuer during the issue period or purchased from the stock market when
the issue gets listed.
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Yields higher interest than bank deposits.
.
Fund does not get locked in during the duration of the instrument.
They are liquid. Can be bought and sold in the secondary market
Pros
Risk of default
Interest income taxable
Cons
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Slide Source:The Economic Times ,article by Prashant Mahesh
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Invest Wisely and Make
Your Money Work For You
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